...energy patch
Tuesday, December 30, 2008 at 06:31AM The theme for Tuesday’s trade remains as it did going into last Tuesday’s trade with a few possible curves thrown in.
The E&P -Shales and a watch of support for the SPX at 855. There is not much else out there we need to watch or trade with or against with these low volume days. Just pick our spots. Stocks bounced a few times off SPX support around 855 and finished at 869. The bias seems to be positive with 2 trading days left in the year. The possibility exists for a nice broad day this week, if we get a nice curve to hit by the Financials. If we get ‘a positive’ GMAC headline ( Alert note today) we could get this action. The SP financials came off worst levels of the day, despite the DOW-Kuwait failed acquisition weighing on some banks committing bridge loans for the DOW ROH follow through deal. GS and JPM continue to show strength implying a market coming to health.
Because we want to keep our hands somewhat clean heading into the 2009 trading season, we haven’t strayed into pursuing more of the crude action affiliated names which is just fine with us. So far the E&P’s are providing enough, outperforming even on a day where Oil ruled the headlines. Today, NATGAS advanced to 6.06, last week it was 5.40 per contract. Todays Natgas 12% gain cannot be fully attributed the rise of oil, we actually saw oil forfeit all of it’s overnight gains at one point before finishing just off $40. We’ll continue to favour the energy patch over the Oil names as long as the tension doesn’t escalate w/ other Oil bearing countries involvement.
We’ve stressed the holiday mode attendance, but keep in mind the market can celebrate on just enough liquidity, just like your family and friends during the holidays. Otherwise, just watch the support levels to the downside talked about here.